Memo to Lesley Grant

[Capt Kremin]

The latest figures from BITRE merit some comment.

http://www.bitre.gov.au/publications...les/1210_M.pdf

While Qantas Intl suffered another reduction in market share, some of it attributable to the A380 problems, all is not gloom and doom.
Some key points:

*QF Intl had an average load factor on all services of 86.7%.

*Jetstar Intl had an average Load factor on all actual international
services of 77.85%. (I.E. Doesn't include the Australian domestic pax and NZ Domestic pax added as padding.)

* Both SIA and CX had load factors less than QF Intl but their number of services to Singapore and HKG respectively DWARFED QF Intl.

* QF Intl and VA Load factors to the US were almost identical. Both of them beat United and Delta by substantial margins.

*QF Intl's Avg load factor to and from Japan was 86.9%. Jetstar Intl was 77.8%

With Lesley Grant supposedly heading up a task force to improve the market share/performance of QF Intl, I would suggest the answers are fairly self evident.

Dear Lesley,

-More people want to fly QF Intl than J* Intl.

-More red and White A330's or 777's are required to compete with SIA and HKG and VA on these key routes.

-J* Intl is not working. Now that it has been more than 12 months since J* took over the NZ Domestic routes and those passengers were surreptitiously included into the J* Intl figures to pad them out, the spectacular yearly increases have stopped. In fact the November 10 figures showed a percentage decrease on the November 09 figures.

Please invest in the things that makes airlines great, the product and the people.

You already have the people; let them know they are valued instead of constantly trying to find ways to undercut them.

Invest in the product that was consistently profitable before this disease known as Jetstar Intl was introduced and we will show you the money.

[LondonSloop]

The chaps in the City can't believe it.

JP Morgan is now saying:'Qantas International remains the stand-out for and we continue to believe this will be the key driver of earnings growth in FY11.'

Qantas' January operating stats show the strong recovery in International.

Just smashing!

[QAN_Shareholder]

Kremlin,

Quoting load factors is all when and good but the statistic that matters for re-investment is whether Qantas international is profitable, and it isn't.

[Capt Kremin]

I would have thought that a shareholder would read the Company reports. Actually it IS profitable.

[balance]

Quoting load factors is all when and good but the statistic that matters for re-investment is whether Qantas international is profitable, and it isn't

Spin all you like QAN. It is management who arent profitable with these figures. They aren't managing such great figures to turn a profit.

We don't need to replace the pilots, or the cabin crew, or the engineers, or the ground staff. WE NEED TO REPLACE THE FRICKIN MANAGERS.

[Black Condor]

Not wanting to get into or start one more QF vs JQ fight I'll stick to the facts.

Jetstar was born with more than one purpose but only one publicised intention.
That was to maintain market share on domestic flights with the entry of Virgin Blue.
We can argue all day and night but that part of the parents intention has been achieved.It's methodology is another argument but it has done the job in that regard.

The problem is that not withstanding the success of the Jetstar formula it's viability domestically does not necessarily translate to international long haul flights.

The geographical location of Australia does not lend itself to the same probability of success that low cost carriers in other parts of the world enjoy.

If QF was given the right aircraft for the job,advertising etc and the correct management approach to staff then it has and always will have the potential to be very profitable.

To do that though the staff need the tools for the job and that includes good management practice.

[fishers.ghost]

Establish JetStar to drive down wages and conditions of mainline
Starve mainline of capital
Transfer all Jetstar costs to mainline
Shrink mainline network to the point of irrelevance
Mainline collapses and put into administration
Employees offered jobs but at reduced wages.
All Qantas Group aircraft painted red and white
Jetstar ceases to exist except on thin leisure routes
Management paid inflated bonuses for rescuing Qantas

[astroboy55]

Kremin,

have you passed these figures on to Lesley or AIPA? Id expect the review of Int will include such things as 'how can our bonuses be maximised' and 'how can we cut costs' rather than 'how can we increase revenue'.....

Information such as this could be helpful

cheers

[QAN_Shareholder]

Kremin,

As far as company reports are concerned Qantas report mainline as one business unit so no separate disclosure on international. However, Joyce commented that the US and UK routes would have been breakeven but for the A380 issues and that Qantas domestic is the most profitable brand in the domestic market. The implication of this is that international is loss making.

I haven't checked the accuracy of the load factor statistics you quote but these seem to be December figures which were artificially high due to A380s being out of service. Hence the conclusion 'more people want to fly QF' is a bit shaky.

[Going Boeing]

Hence the conclusion 'more people want to fly QF' is a bit shaky.

Shareholder, also your reliance on what Joyce says is also shaky as the EBA's for the Long Haul pilots and LAME's have expired. Everything he says to the press is aimed at reducing the bargaining power of his employees. Dixon was an exponent of this and Joyce has followed suit.

Do you really think that ?

Lester, all the evidence within the Qantas Group is that is what is actually happening (intentionally) which is why the LH pilots have to make a stand now otherwise QF mainline will be replaced by "Jetstar Offshore".

[Capt Kremin]

QAN Shareholder, my statistics are from BITRE, which are more accurate than the QF reports that continue to hide the fact that passengers flying domestically in Australia and NZ are being counted as Jetstar International passengers (something that inflates the Jetstar Intl figures by almost 100%) ...... something that Ben Sandilands finally got out of them months ago.

The JP Morgan report that London Sloop alluded to is even more crystal clear.


* Qantas January operating stats show the strong recovery in International is continuing (loads were 84.2% in Jan vs 83% in the pcp and an 80.7% long-run average)

* Mainline International was again the stand-out with January loads up 2% to 86.5% (from 84.5% in the pcp) despite discounting in the prior period
* Positively higher international loads have coincided with yield growth, up 11.1% YTD (pre currency). Domestic yield growth slowed in January, now up 0.1% YTD (pre-currency) due to strong domestic capacity additions
* Domestic loads of 75.2% in January (77.8% in the pcp) were impacted by the Queensland floods
* We estimate that Qantas generated ~$100m in additional revenue in January relative to the pcp (pre currency) despite the impact of the QLD floods

* Hedging update - Qantas' fuel requirements for FY11 are now 96% hedged at a worst-case crude oil price of ~$94.50/bbl (assuming $5 option premium). Fuel costs for 2H11 are expected to be ~$2bn (in line with previous guidance). In FY12 ~35% of fuel requirements are hedged at a worst case oil price of ~$101/bbl (assuming $5 option premium)

Detail:
* International remains the stand-out for Qantas and we continue to believe this will be the key driver of earnings growth in FY11
* Qantas continues to act rationally in terms of international capacity adding 3% FY11 YTD (excl Jetstar Asia). We believe this has been a key driver of yield and load strength (although the A380 outage has also resulted in reduced capacity on the European and US routes)

* The impact of the Queensland floods makes it difficult to assess the Domestic load stats. However slowing yield growth is not unexpected and coincides with the BITRE airfare index (yield pressure is primarily in the leisure segment)
* Qantas has added 11% in new domestic capacity YTD. Of this growth 46% is attributable to Mainline and QantasLink which we view positively as Business and Full economy fares continue to improve relative to the pcp

* We retain our Overweight recommendation for Qantas
* International yields remain well above pcp levels and January loads were also stronger than anticipated. However we flag that the growth trajectory of yields may slow in the second half as they begin to track stronger comps

[hotnhigh]

Memo to Lesley and Alan,
WTF do you need a committee of 20 to be set up to tell you what's wrong?
If you don't already have an idea, well what the hell have you been doing for the last 'x' years?

[QAN_Shareholder]

I don't disagree that Joyce makes statements to the press to influence EBAs but the idea that Qantas international is actually doing fine just doesn't stack up. I know how some desperately want to believe Jetstar is loss making but comparing Tiger, Jetstar and Virgin profits, yields and costs suggests Jetstar is profitable.

Joyce has also said Qantas domestic is more profitable than Jetstar domestic, seems you have to cherry pick statements to make the conspiracy theory fit.

[Millet Fanger]

International is underperforming. If we continue on our current path, there will be a real question-mark over the viability of Qantas International.These are some of the comments AJ made at the Press Club in February while announcing Lesley Grant's review of the 'sick' QF International business.

Did AJ not know that the load factor for QF international was up 2% in January to 86.5%? Yield for international up 5.7% for the month and 11.1% for the year!

JStar international had a load factor so far this year is 78.5%!

Considering that QF international has the oldest aircraft in the group, and that management is 'attacking' it's employees both internally and externally. You tell me which one is "underperforming"?

QAN Shareholder, you should be using your vote to get a CEO that either, knows his business better, or, is honest about his true agenda.

[dragon man]

The thing thats jumps out at me from those figures is how can Jetstar Intl with a load factor of 77.8% be making money. If Qantas mainline at 86.5% load factors and higher yields is bleeding then Jetstar at 77.8% must be close to death.

[Capt Kremin]

AverageLoad Factor/Pax stats from October/November 2010

Qantas Intl October 82.85%
Jetstar Intl October 78.35% Pax Carried Internationally 192456/ Reported to ASX 353000
Qantas Intl Japan 80.0%
Jetstar Intl Japan 67.9%


Qantas Intl November 83.35%
Jetstar Intl November 77.35% Pax Carried Internationally 171578/ Reported to ASX 332000
Qantas Intl Japan 82.9%
Jetstar Intl Japan 72.85%

Who is cherry picking again?

[SkyScanner]

QAN-Shareholder, if you can work out the Jetstar costs then you are doing a better job than every financial institution in the country because even they cannot!

Do you know how much Jetstar pay Qantas to lease the aircraft off them?
What rates they are charged for maintenance?

Take out the near $1 billion for mainline in depreciation charges and then tell me how long haul is really doing...

[balance]

The only reason that Jetstar loads are at 77.8% is because the punters are FORCED to fly with them. Frequently, there is NO alternative.

It has been said again and again, the passengers DETEST Jetstar. HATE them. More than we as crew do. But they have no choice.

But unfortunately, with the mismanagement of the company, Jetstar will never be close to death. They will continue to leach off Mainline, and management will continue to spin.

Disgusting world we live in. I sometimes cannot believe the way my fellow human beings behave.

[QAN_Shareholder]

Kremin,

So we have reached some common ground QF international load factors around 83% and Jetstar international around 78%. My objection was using a figure of 86% for December when impacted by A380 issues.

Skyscanner,

Why on earth would you add back $1bn in depreciation for mainline? Capex per annum is running at $1bn and for management accounting purposes you should deduct another $1bn for cost of capital.

MF,

Yields may indeed be up 11.7% ytd but only since they fell 20%+ in the prior year. The previous year was a catastrophe, yes this year is better, it doesn't make it good.

[Millet Fanger]

QAN Shareholder

Why did AJ come out in public and attack QF International and not JStar International? QF International has the better matrix.

If last year was so bad for QF International, why has it taken AJ so long to act? Was he asleep at the wheel, or is he better as a CEO of a budget operator than a premium operator?

I still think you need to exercise your shareholder responsibilities to vote for a new CEO!!

[QAN_Shareholder]

MF,

I'm not sure AJ has taken so long to act, since CEO he has cut management overhead, organised reconfiguration of long haul fleet, rescheduled 787 and 380 deliveries and coped pretty well with GFC and A380 incident.

I think Dixon made errors, investing heavily in long haul fleet at peak of cycle, too few seats on A380s (or perhaps Borghetti's decision?), splitting QF into divisions amongst others. But I can't really point to much that AJ has got wrong. I only get to vote for the board and I have my reservations about a few of them but If I did get a vote on the CEO it would be favourable.

[skybed]

Bonuses have already been passed at the last AGM.
listen to the coal face who repeatetly told you to get one international product (PC/JC/WC/YC and one domestic (JC/YC) product. currently it's a dog's breakfast accross the fleet.
Get 777 and save another 700 million in fuel costs.
get more destination in Europa/Asia and there is more /increased choice for customers.
Review finished. memo send to Board.
Board meeting that's another story altogether.
Must and is the most incompetent Board in the country!!!:yuk:

[surfside6]

Mr.. QAN Shareholder you have been here for a minute.So far you have shown yourself to be a poor mathematician and a poor judge of character.
The figures do not lie.Break even point for a LCC is a 75% load factor.Further LCC very existence are predicated on oil prices of around $US80/barrel.With current prices somewhat higher Jetstar is obviously being aided by Mainline's hedging arrangements.
As has been said Jetstar was established to drive down mainline wages and conditions.Qantas pilots have drawn a line

[Daniel Bernoulli]

I smell a company man on this site! Mr QAN shareholder - perhaps you have only had your shares as long as you have been a member of this forum and that is why you are satisfied with AJs performance. If you have had your shares for longer than this I am sure you would be calling for his head.

[QAN_Shareholder]

Surfside,

Jetstar domestic ytd load factor is 80.5% and haven't calculated average for WTI oil price but from looking at a graph it was probably around $83. So breakeven at 75% load factor and oil around $80 on your metrics it implies Jetstar domestic was profitable in first half results.

I hadn't heard the fuel hedging argument before, from the figures they report I think it is impossible to prove or disprove, is this just a suspicion or do you have any evidence? I am open minded on this stuff, some interesting points get raised on these threads but would prefer if we can skip the name calling.

[skybed]

J* always will be profitable. It,s called creative accounting. evidence is hard to come by as all the numbers and subsidies are done by treasury(who pays what and what for). Certanly any details we wouldn't put on this website. :*

[surfside6]

How many shares do you possess ?
Are yoy happy with the decline in the share price ?
Are you happy with the lack of dividend ?
You were not called names.Your abilities however were called into question.
Qantas mainline has been and continues to be poorly managed.
Jetstar is a corporate parasite.Nothing more.

[tenretni]

Hey QAN shareholder,

Frankly your opinion on AJ and his performance counts for very little. You see for every person who thinks AJ is great you will find a person who thinks otherwise.

Pretty subjective nonsense at the end of the day. So dont bother with that spin it just won't wash.

I see Jetstar produced revenue some one fifth of Qantas Mainline. Question for you oh wise one. What was the OPERATING cost of the Jetstar unit in this reporting period? According to Joyce and his creative accountants little to non existant.

Wake up my man. :=

[Fliegenmong]

QAN....

"I hadn't heard the fuel hedging argument before"

Exactly how new to this are you???:confused:, perhaps you also have not heard of how to make a small fortune in the Airline game??......start with a big fortune...:hmm:

[QAN_Shareholder]

You actually can determine J* fuel costs per ASK from the information they report. On my rough figures they are between Tiger and Virgin, being a bit closer to Tiger than Virgin. This feels about right given lower seat density than Tiger and some A330s but higher seat density than Virgin and no routes as long as US. So fuel hedging cross subsidies sounds like a myth to me but if someone can show otherwise then I'm happy to be proved wrong.

Regarding AJ, I see post after post accusing incompetence, and I'm curious as to whether there is anything substantive to it. The share price since AJ has been CEO has been driven by GFC, A380 issues and more recently oil price, I don't think AJ can reasonably be held responsible for any of them.

[fishers.ghost]

You sure ask a lot of questions but dont answer many.
You make a lot of assertions that are supported by little fact ... just your rough figures.Wherever they might come from.Although I could hazard a guess as to their origin
As far as fuel costs per ASK are concerned they are irrelevant.
Its who foots the bill thats important.Gee,by my rough figures that would have to be Qantas mainline.
Ask the CEO of JetConnect who pays his fuel bills.
His answer would be most enlightening for you.
As far as AJ is concerned ...what has he done in his tenure?
Nothing that hasnt been done before.Joyce just reads from Dixons old script notes.The guy is an out of his depth number cruncher.It takes more than that to run an airline.
Putting Grant in charge of a think tank task force is like putting Berlesconi in charge of a brothel.Like him she is bound to phuck it up

[QAN_Shareholder]

So fuel costs: results presentation for Qantas gives figure for J* CASK ex fuel of 4.9c. J* ASKs are reported monthly, J* revenue and EBIT was reported in half year results so you can calculate total CASK and hence you get fuel cost per ASK. Tiger report CASK including and excluding fuel on a quarterly basis in S$. Virgin report fuel cost and also ASKs. So seems everything you need to calculate. I did a bit of rounding of numbers hence why rough calculations. But maybe I got it wrong.

[Ka.Boom]

Gee.You Think
Qantas pays for almost all of Jestar's computer time,engineering, fuel,reservation system,landing charges.Its called cost apportioning.Google it.If David Cooperfield wasnt an illusionist he would the CEO of JestStar

[Sunfish]

QAN Shareholder is an obvious management plant, read his posting history.

Any division of Qantas can be made "profitable" or loss making by simple internal cost allocations. I know. I've done it in another airline some time ago.

Furthermore, over the last Ten years QF Management and its Board have proved themselves to be extremely economical with the truth time and again.

What is quite obvious is that Qantas is playing to a "script". That script involves a plucky, young, cost conscious Jetstar and the heroic actions of the Qantas Board and Senior Management saving the Qantas Group by wresting its future from the dead hands of the dinosaur like workers who live in Mainline and International.

The trouble with companies who script things is that reality intrudes at some stage and destroys the business. Just ask the shareholders of ABC Learning, Opes Prime and Lehman brothers.

Fuel prices have the capacity to destroy cheap fares permanently, then the LCC model will look pretty dumb. Watch Ryanair.

[WorthWhat]

Record interim profit for Qantas

Qantas Airways put its A380 problems behind it when it announced a profit of A$241 million (US$242.86 million) for the six months to December 31.

The result compared with a $58 million profit a year earlier. Revenue rose 10% to A$7.6 billion while costs declined by A$173 million.


Source: March Edition of Orient Aviation

:)

[GlobalMaster]

I don’t understand, Business Spectator recently quoted AJ as saying there's; 'No value in Qantas'

[WorthWhat]

As the man from JP’s in London said GM.

'Qantas International remains the stand-out for and we continue to believe this will be the key driver of earnings growth in FY11.

Qantas' January operating stats show the strong recovery in International.'

[QAN_Shareholder]

'an obvious management plant', actually no, on occasion I do get the opportunity to put questions to management hence my interest.

As for being economical with the truth try the post 'Record interim profit for Qantas'. I believe Interim profits for the group were higher in 2003, 2004, 2005, 2006, 2007, 2008. I haven't checked before 2003 but suspect it was the case going back quite a few more years.

[mister hilter]

QAN shareholder you're probably right re profits (interim) being higher 2003-2008 inclusive.
Try using 'RECORD' as a verb not a noun.

[balance]

To be perfectly honest, I'm not particularly stressed by QAN Shareholder's comments. He is as blind as he is stupid. He reminds me of a certain middle eastern dictator and an Australian Prime Minister having the same problem with reality (I know that one is going to be howled down by all of the PC Labor politicians on this website!;)).

But I don't think he is a management stooge. I reckon he is an anti QF troll (ironic, isn't it?) who is on pprune simply to wind others up. He is best ignored.

[breakfastburrito]

QANshareholder, fuel hedging
“In terms of fuel hedging, we hedge with Qantas, so we do it completely together. There's no point, Jetstar is 100% owned subsiduary owned by Qantas doing something that would completely counteract what Qantas is doing, which is largely a cash flow issue, its about mitagating potential losses through fuel or currency hedging so it would be silly for us, given we pool our cash together and we operate a common treasury function to be out in the market doing something completely counter to Qantas”
Source:Jetstar's Buchanan Interview on Business Strategy (http://www.bloomberg.com/video/58273492/) March 10, 2010 at the 5:24 point in the interview.

You appear to have a handle on the, how can I put this delicately, the "official" Qantas story, but obviously lack the nuanced industry depth of understanding, or you would have known of this interview. There is no transcript of this interview available on the web, so it only those with experience in the industry would be able to remember. Poster such as sunfish, have excellent management background info that you should listen too. Many other posters have equally valid "inside" information that will never be disseminated through written channels ranging from engineering, IT & cabin & pilot issues.
Almost everyone here wants to see Qantas succeed, I suspect this even includes our competitors, as they know if Qantas fails, then there will be short term gain, at a long term cost.

The fundemental issue is that management decided many years ago to work against the staff, rather than with them (People Agenda (http://www.pprune.org/dg-p-reporting-points/429828-merged-senate-inquiry-12.html#post6279790)). The pilots offered a deal to get Australian Airlines up and running, the pilots where willing to negotiate & talk, but management decided that it would rather destroy one side of the business, whilst building the other side. It would rather employ 200 hour cadets in its jets in the right hand seat, than those with 3000 or even 5000 hours jet experience, with the eventual aim of making these pilots redundant.

I also feel you are willing to open your mind, look, listen, learn & decide if you still want to be a shareholder in Qantas. There is fantastic industry knowledge on this board that can be tapped if you are constructive.

[Jack Ranga]

Your intelligence must be seriously questioned if you buy shares in ANY airline. Most airlines return on investment is appalling. The risk/reward ratio investing in airline shares doesn't stack up under any measurement.

Institutions that are forced to invest in Qantas must sh!t themselves.

[ampclamp]

I thank black condor for the sensible post.Kremin also fo rhis research and thoughtful approach.:ok:

QF had to create jetstar or die.Another major would have filled the space and eaten QF alive.
I also agree that the way JQ is used to lever staff and their conditions is deplorable as is the less than transparent reporting of pax numbers and costs to suit the cause.
It does not need to be that way.They can co-exist as complementary entities.

I fail to see what a committee of 20 can do that thousands of staff have been telling them for ten years or more.
Or could I be a cynic and suggest they know QF Int is doing better and the committee will reap the rewards knowing the outcome already?:E

[Taildragger67]

So let me get this straight:

- the CEO is saying that QF mainline international is a drag on the rest of the business and needs radical work to stop it dragging down the rest of the company;

- the JPMC analyst is saying that QF mainline international is the standout performer and will continue to be the standout performer, benefitting from a strong recovery in that segment.

These statements appear to be entirely contradictory.

How can two supposedly intelligent people be 180 degrees apart on the same set of numbers?

On another issue:

In terms of fuel hedging, we hedge with Qantas, so we do it completely together. There's no point, Jetstar is 100% owned subsiduary owned by Qantas doing something that would completely counteract what Qantas is doing

I don't understand how JQ doing its own hedging, would necessarily "completely counteract what Qantas is doing".

[breakfastburrito]

Taildragger, they could be taking the opposite trade to each other (actually, that would be a "perfect hedge" assuming they were for identical amounts). Given that they use appear to use options, running two hedge books could actually increase systemic risks for the company. Options need to be continuously monitored and the hedge adjusted periodically to account for movements in the underlying, time decay, volatility & interest rates to ensure that you are actually hedged against the risk you seek to mitigate.

But that is all just bunk, in reality is its all the same company underneath, with a different top coat of paint, as per the "Jetconnect bills paid by Qantas" revalation. Buchanan even admits it in the clip with a common treasury. The figures appear to me to be just "book entries, with Qantas & Jetstar P&L statements completely notional.

[QAN_Shareholder]

Taildragger,

The statements do appear contradictory but only since taken out of context. The JPM note is commenting on the January traffic figures and in terms of load factors international was 'the standout performer'. I think he's missed the fact that the A380s weren't back on the US route from the start of January so load factors inflated a bit, impact perhaps not as significant though as in December.

The problem though is the yields, they have improved very significantly from the prior year and hence international profit has been the biggest improvement to group profit. So it is the most improved, but due to shifting from huge losses to near break even.

[AlphaLord]

Dear boy what exactly are you trying to say.
What is your argument attempting to substantiate ?

[-438]

Which part of the Group pays the bills for treasury dept, these fuel & currency traders do not come cheap?
In fact which part of the group pays all the executive wages, I'd be very surprised if any of the AJ's wage comes off Jetstar's bottom line.
I would guess it would funded by the same part of the Group that spawned a low cost carrier with dozens of new jets, ground service equipment, flight training services, terminal space, undercost engineering services, advertising budgets etc over a short period of a few years.
Since day one Jetstar have always turned a profit and Qantas mainline has been a major drag on the Group's bottom line...........?

[stubby jumbo]

Hey Lislee, here's an idea.

Spin off JQ.........flog it off, get rid of it, sell it, cash it in......pocket the cash ...then we can back to how it was.

Then we may have a premium brand again:D

PS: the cash we get......can buy /lease a few triplers whilst waiting for the Dry "dream" Liner.

[QAN_Shareholder]

438,

See interim financial report p19, corporate costs are reported separately from Qantas and Jetstar. I don't know for a fact but I would imagine treasury and AJ's salary are included within corporate hence not allocated to the operating divisions.

I appreciate that some won't believe it but I am trying to be objective. I could choose to sell Qantas shares today if I thought they were overvalued. I think that gives me more objectivity than if my family income was paid by Qantas and if I moved elsewhere I might need to take a 40% pay cut. Some valid points have been made, I am intrigued enough to take a closer look at whether some J* long haul flights have such low load factors that they must be heavily loss making, but some of the other comments are poorly informed and deliberately misleading.

[Shark Patrol]

Back to the point of the thread.

I see that the Top 10 airlines for onboard cuisine were announced today - Emirates, Singapore, Malaysian, Thai all mentioned .... Qantas never rated. Last time I paxed in First, the main meal was a skinless chicken breast with peas and carrots! Back in Economy, lunch on domestic flights is often a glad-wrapped sandwich and a piece of fruit.

Why would people bother paying a full-fare premium ticket price when they could buy the same stuff on a Jetstar flight, probably for less than the difference in fare price between Qantas and Jetstar. To me, this is where the problem lies. People will pay more if they consider they are getting what they pay for. While reducing the cost of a meal makes weasly beancounters ecstatic, it does not impress those who pay many, many thousands of dollars to fly in Business or First.

Lesley, put the premium product back to where it once was and charge more for it. Make it the BEST food and inflight product and CHARGE accordingly. People will pay if they are getting what they pay for. But I keep forgetting that Jetstar is just AMAZING while long-haul is a dud!!

[hotnhigh]

From article Herald Sun
August 19, 2007

"Lesley Grant, Qantas group general manager for customer products and services,"




Anyone see the problem here?

[standard unit]

Yes......and has been the problem for years :ugh:

There is a very good reason why Borghetti didn't poach her.

She's now his greatest asset.

[TBM-Legend]

Flew QF BNE-MEL Tuesday....cloth fabric seat faling apart. average minus service and late.

flew home Jetstar from Avalon yesterday. Nice clean aircraft with leather seats and very friendly and happy crew [all for $79.00] and on-time....

All of you who work for QF had better wake up. You can't blame management for everything...

[UKSqueeze]

Back to the point of the thread.

I see that the Top 10 airlines for onboard cuisine were announced today - Emirates, Singapore, Malaysian, Thai all mentioned .... Qantas never rated. Last time I paxed in First, the main meal was a skinless chicken breast with peas and carrots! Back in Economy, lunch on domestic flights is often a glad-wrapped sandwich and a piece of fruit.
Lesley, put the premium product back to where it once was and charge more for it. Make it the BEST food and inflight product and CHARGE accordingly. People will pay if they are getting what they pay for. But I keep forgetting that Jetstar is just AMAZING while long-haul is a dud!!

Time to get rid of Neil Perry I think

[breakfastburrito]

Flew QF BNE-MEL Tuesday....cloth fabric seat faling apart. average minus service and late.

flew home Jetstar from Avalon yesterday. Nice clean aircraft with leather seats and very friendly and happy crew [all for $79.00] and on-time....

All of you who work for QF had better wake up. You can't blame management for everything...

OK, lets pull your list apart:

QF

Cloth fabric seating.... Management CHECK
minus service.... Crew CHECK
late... Crew or management issue, who could say?


J*

Nice Clean aircraft... Management CHECK.
leather Seats... Management CHECK.
Happy crew... Crew CHECK.
on-time... Crew or management, who could say?
Price... Management CHECK.


So, I see lots of things on your list that management control, and really only one that the crew can make a difference (minus service, vs happy crew). So, yes management can be blamed for most of the problems at Qantas by your own measure.

[DEFCON4]

Its very difficult to be motivated at work when you are embarrassed by the product you are offering.
Going to HNL for example you will spend the first two hours of the flighrt apologizing to passengers for the below standard product.The Cabin interior of a 20 year old 767 leaves a lot to be desired.No inseat IFE,multiple seat problem,reading light problems,Av gas fumes in cabin at start up.The list is endless.
Apology Airlines,the Flying Cicus.Either one is an apt name for Qantas.Qantas is about to spend a fortune upgrading their office buildings at Mascot.Pity they couldnt spend the money on the hard product.
Ms Grant come down out of the tower and have a look at the mess you have created thorugh both incompetence and neglect.You do not neeed six months and a twenty strong task force to find out whats wrong.
Talk to your front line staff for ten minutes and they will tell you

[TBM-Legend]

and this is the answer
YouTube - Cheap Flights with subtitles (http://www.youtube.com/watch?v=HPyl2tOaKxM)

[fishers.ghost]

The above youtube video is to be used as JestStars new Ad campaign...in Japan

[limelight]

So, you starve your premium product of the facilities needed to satisfy customers. Everyone can see this. Management cannot be THAT stupid.

So, what is the agenda? Bearing in mind that QF is a public company, would it not be possible to get a group of shareholders to ask the question that everybody wants answered. 'What is the agenda?'

Maybe we could send Sunfish into bat, I am sure he would enjoy it!

I too flew J* last week, MEL-TSV, new A320, nice.

[breakfastburrito]

TBM, Brilliant!!

[-438]

The problem QAN shareholder (are you sure you don't work for QAN?) is that none of the employees believe much of what Executive level management have to tell us.
You can only cry wolf so many times or use the phrase 'we do not intend' or 'we currently have no plans for...'
If you are indeed a QAN shareholder with no affiliation with the company, you may well find better returns elsewhere.

[C441]

Conflict of Interest or is the result known before the enquiry?

You would think that the management of any company that was serious enough to commence an investigation into why their product is failing in the market would employ an independent group to pursue answers, not a person that was responsible for applying the policies that lead to the failure in the first place.

Imagine if, following a serious incident involving injury to passengers or sever damage to an aircraft, the investigation was lead by the Captain and crew responsible. Conflict of interest? Never. :rolleyes:

Within Qantas it seems that outside help is only sought to cull not to develop.

[Fruet Mich]

If jetstar are not performing domestically and they have been running for so long pidy backing off Qantas, then how the hell are they going to be a "star" performer as an international airline? Rising oil etc, I'd say there will have to be some quite sustantial creative accounting to make this arm of the business look profitable. If Qantas international is "not performing" you're going to be in a world of pain with your new international arm!!

[Sunfish]

Guys, Qantas is running on a "script". I've only seen this done once before and it doesn't work.

The script is about a heroic Board of Directors and senior managers saving the Qantas brand from the dead hands of a highly unionised, backwards looking, brain dead, old and wrinkly workforce by nurturing the love child of Marg. Jackson and Geoff Dixon - Jetstar.

Little baby Jetstar was born young, fit, profitable and competitive. The nasty, evil, old, ugly, wrinkled employees at mainline and International hate their baby brother and want to do away with him if they could. The Board and Senior managers have protected baby Jetstar from the icky wicky "Legacy" employees and old has beens.

Baby Jetstar is now a grown man and is going to kick the nasty mainline and international in the backside and boot them out of the family home, never to return. Then the Board and Senior managers will join with baby Jetstar, have a big party, and they all lived happily ever after.

Well that is the script, more or less. I once was part of an IT company that tried to pretend to its financial backers and it's staff that it was unprofitable and "under threat", when the reality was that it was doing very well thank you. The strategy is sometimes called "keeping Two sets of books".

The trouble with "scripts" is that fact is stranger than fiction and reality eventually intrudes, and then the play acting has to stop, and fast. For example, if Qantas was ever placed under pressure by its lenders and had to engage in "lifeboat drill" then the truth about profitability and the contributions made by the various fictional entities would have to come out - followed by a string of resignations I suspect.

Another interesting issue is the problem of oil just now. What happens to you LCC model if flights become more expensive and air travel thus confined to the carriage trade?

[breakfastburrito]

Sunfish, keep the "inside" thinking coming, this is our biggest blind spot, thanks for your posts.

On the subject of oil, anyone involved with LCC carriers should view this video:Jeff Rubin, the former Chief Economist of CIBC World Markets (http://www.youtube.com/watch?v=wYuLjGQQ-jg)and the author of Why Your World Is About To Get A Whole Lot Smaller built his reputation as one of Canada's top economists based on a number of successful predictions including the housing bust of the early 90s and the rise of oil prices. In his recent book, Mr. Rubin predicts $225 per barrel oil by 2012 and with it the end of globalization, a movement towards local sourcing and a need for massive scaling up of energy efficiency. www.thebusinessofclimatechange.com (http://www.thebusinessofclimatechange.com)

He made these predictions in 2009.

[skybed]

C441 wrote "Conflict of Interest or is the result known before the enquiry?

You would think that the management of any company that was serious enough to commence an investigation into why their product is failing in the market would employ an independent group to pursue answers, not a person that was responsible for applying the policies that lead to the failure in the first place.:ok:
"
THE BEST COMMENT OF THE THREAD!

[Ka.Boom]

Establishing a task force is usually the responsibility of a senior executive.
Heading one up is unusual.Looks like Grant may not have a position to go back to when the task force is disbanded.
May be a clever way of terminating her contract.No position.No contract
What say you Sunfish.The beginning of a Cabin Services cleanout?

[Sunfish]

The first thing to understand in turning a business around is that the people who got you into the mess most probably can't get you out of it. That is because lateral thinking is required, and senior managers are usually heavily invested in the status quo. This is one reason for giving senior managers golden parachutes, it makes it slightly easier for them to come to the conclusion that maybe they are part of the problem, not the solution, and that they had better go.

The second thing I think you can assume is that the review will not provide any tangible results beyond the useless "work smarter not harder" mantra. My guess is that the Board and senior managers are still following "the script", so the review has to follow it too.

What is required is a new Board and CEO chosen carefully to ensure that narcissist are excluded, followed by a careful weeding out of narcissists from all levels of management. I have yet to see this attempted, let alone succeed, in any business in the world - yet, although HR people are just beginning to wake up to this problem that I have been writing about for at least Five years.

JSTOR: An Error Occurred Setting Your User Cookie (http://www.jstor.org/pss/4165819)

www.dattnerconsulting.com/presentations/narcissism.pdf

Youth increasingly narcissistic says psychologist Jean Twenge (http://www.smh.com.au/lifestyle/lifematters/new-generation-infected-by-narcissism-says-psychologist-20110302-1bewf.html)

You need a chairman who understands that his job is to make it possible for all managers and employees to succeed in the tasks they are given. You then have to drive that idea and thinking right through the organisation. It is the exact reverse thinking of the current Board and management of the company as far as I can tell. That type of thinking was implicit in that comment from Jackson, Dixon or some such that: "The Board has done more for the success of this company than any employee" - that type of thinking is poisonous.


I don't think any of this is going to happen. I think QF is going to be a basket case from which a few remnants might be saved. Oil prices are going to kill the LCC model.

[fishers.ghost]

Bleak for Qantas mainline and not much better for JestStar.
Only in Australia would this corporate mismanagment be tolerated for so long.
When the company falls over there will golden handshakes all round and not one prosecution.
Ms Grant....how do you sleep at night?

[airtags]

No the last survey was NOT published and the safety survey was 'paraphrased' - none of the surveys disclosed actual numbers of respondents so the % attributes are meaningless. Trend is therefore also irrelevant

The Group Safety survey did have some damning anecdotal responses but of course this ream of paper was neither tabulated or considered. (Shame it can't be given to Senator Xeno

This current survey has a number of flaws (bias) in the question methodology and in itself in that it relies on reducing the impact by utilising 7 sub categories from which only responses in multiples of 10 will be reported.

The last 4 questions also are set up as a buffer for the Senior Management and are typically irrelavnt to the majority of the operational respondents.

I think answer it honestly even though the proponents of the survey are being anything but.....

[surfside6]

There are two areas where you can enter text and express a point of view.
It provides an opportunity to name names and make it quite clear that you are disengaged because of poor management from middle and senior executives.The survey is touted as being confidential so it is hoped they have no recourse regarding disparaging comments.
Apart from these two areas the questions are loaded to allow managment an out
How much does this cost? Whatever it is its a waste.
What is required is behavioural change from management not the window dressing we have seen in the past.

[rodchucker]

Surely the Honourable Senator can be fed a blank form with the right prompting to ask the results.

There is a great deal of precedent for culture being an underlying cause of corporate performance so is a legitimate line of enquiry should they wish to go there.

Would be good to see the CEO's squirm on this one.

[PW1830]

Results of the last tech crew engagement survey have been on the website since December 2010

[Captain.Que]

They were published because they were good figures by comparison.They exceeded 22% engagement which was the companywide norm.No other area of the company had the survey results published from my understanding.No doubt I will be corrected if in error.

[Bates Motel]

Don’t know why everyone is getting excited about survey results. The results are not important, what is far more important, (in a process and bonus driven working environment), is the fact that a survey was indeed conducted.
So long as management conduct a survey, they have achieved their KPK’s, their KPT’s, their KMG’s oh crap!, they’re on their way to collecting the next bonus. The result is unimportant and they don’t give a flying freck if we are joyously engaged, somewhat engaged, engaged, somewhat disengaged or spitting venom.

[33 Disengage]

Bates - Although most employees have rapidly been moving down towards your last two options on the survey, a new option is about to be added - Psycho!

[koala1]

lesley is VERY good at conquer and divide .... she came from air nz, just ask the crew members at air nz !!!! she literally divided the cabin crew into 2 groups (ISD and normal cabin crew); she promised the ISD better conditions for a new individual contract and when it was signed, promises were not delivered. hence, the collection agreement both groups had were nulled and void, and became INDIVIDUAL contracts for everybody.

there was no union anymore, it is called collective bargaining (FARSA) .. what a joke; those greeding ISDs signed the individual contracts and screwed their colleagues (cabin crews), not to mentioned being screwed themselves by lesley m grant !!!

good luck to all of you at QF mainline groups on ur future contract negotiations ... all of you different groups of unions MUST be UNITED to negatiate, other she will conquer and divide, and set up MORE overseas based jobs.

[joeflyguy]

koala1
lesley is VERY good at conquer and divide .... she came from air nz, just ask the crew members at air nz !!!! she literally divided the cabin crew into 2 groups (ISD and normal cabin crew); she promised the ISD better conditions for a new individual contract and when it was signed, promises were not delivered. hence, the collection agreement both groups had were nulled and void, and became INDIVIDUAL contracts for everybody.

there was no union anymore, it is called collective bargaining (FARSA) .. what a joke; those greeding ISDs signed the individual contracts and screwed their colleagues (cabin crews), not to mentioned being screwed themselves by lesley m grant !!!

good luck to all of you at QF mainline groups on ur future contract negotiations ... all of you different groups of unions MUST be UNITED to negatiate, other she will conquer and divide, and set up MORE overseas based jobs.

While what you say is based on fact the majority of your quote is utterly wrong. I know. I was there ...

[watch your6]

Which part is wrong?
If you were there sounds like you were one of these ISDs

[JDI]

Can't wait until Q are forced to answer the 61 questions concerning how Q has paid for almost ALL J* operating costs, to specifically make QI nternatioal "look" bad!!

Qantas engineers serve carrier with Jetstar cost questions | Plane Talking (http://blogs.crikey.com.au/planetalking/2011/08/16/questions-that-qantas-investors-may-like-to-have-answered/)

[indamiddle]

if lislee gets cut from the executive she can still ask her nephew ,whom she promoted to manager of 'customer care', for a job.
ian, you should be very careful where you second staff from, they have you seen you bury the skeletons and they have kept the dates. your closure of customer complaints is breathtaking

[tail wheel]

Reverting back to the J P Morgan quote at Post # 11 on page 1 of this thread:

* Qantas January operating stats show the strong recovery in International is continuing (loads were 84.2% in Jan vs 83% in the pcp and an 80.7% long-run average)

* Mainline International was again the stand-out with January loads up 2% to 86.5% (from 84.5% in the pcp) despite discounting in the prior period
* Positively higher international loads have coincided with yield growth, up 11.1% YTD (pre currency). Domestic yield growth slowed in January, now up 0.1% YTD (pre-currency) due to strong domestic capacity additions
* Domestic loads of 75.2% in January (77.8% in the pcp) were impacted by the Queensland floods
* We estimate that Qantas generated ~$100m in additional revenue in January relative to the pcp (pre currency) despite the impact of the QLD floods

* Hedging update - Qantas' fuel requirements for FY11 are now 96% hedged at a worst-case crude oil price of ~$94.50/bbl (assuming $5 option premium). Fuel costs for 2H11 are expected to be ~$2bn (in line with previous guidance). In FY12 ~35% of fuel requirements are hedged at a worst case oil price of ~$101/bbl (assuming $5 option premium)

Detail:
* International remains the stand-out for Qantas and we continue to believe this will be the key driver of earnings growth in FY11
* Qantas continues to act rationally in terms of international capacity adding 3% FY11 YTD (excl Jetstar Asia). We believe this has been a key driver of yield and load strength (although the A380 outage has also resulted in reduced capacity on the European and US routes)

* The impact of the Queensland floods makes it difficult to assess the Domestic load stats. However slowing yield growth is not unexpected and coincides with the BITRE airfare index (yield pressure is primarily in the leisure segment)
* Qantas has added 11% in new domestic capacity YTD. Of this growth 46% is attributable to Mainline and QantasLink which we view positively as Business and Full economy fares continue to improve relative to the pcp

* We retain our Overweight recommendation for Qantas
* International yields remain well above pcp levels and January loads were also stronger than anticipated. However we flag that the growth trajectory of yields may slow in the second half as they begin to track stronger comps

Why would Qantas's largest share holder, J P Morgan, make that optimistic statement, in contradiction to the public statements of Qantas management?? :confused:

As he largest single share holder in Qantas, one would assume J P Morgan have excellent and timely access to Qantas financial performance? :confused:

Perhaps the Unions should be by-passing QF management and questioning the veracity of J P Morgan's assessment, with Qantas largest share holder?

As an observation, if a carrier is not making costs at an 86% average load factor, it should not be in the game. :=

[Sunfish]

Tailwheel, someone in JP Morgan is going to be spanked for writing that, but it is difficult to know what for; writing the truth or writing a big fat lie, or making a simply awful mistake, because the statement is at variance with what Qantas says today.

[Romulus]

JP Morgan is not the largest shareholder in Qantas, those shares are part of JP Morgan's custodial (trustee sort of thing) role for superannuation funds. The various funds own the shares but they are required to be held by a custodian who transacts at the direction of the fund in question.

The analysis comes from a separate part of the bank and no, they do not get special private access to any financial information, that would mean jail time if they did (assuming they got caught).

[Sunfish]

Romulus:

The analysis comes from a separate part of the bank and no, they do not get special private access to any financial information, that would mean jail time if they did (assuming they got caught).

Mate, it is extremely dangerous to assume that the Chinese walls that supposedly exist between various parts of financial institutions are impermeable.

I will bet my left testicle that any J. P. Morgan analyst who produced a negative report on Qantas before any other institutions did the same would be asked to perhaps "review" it because the Chinese Walls only reach so high.

It is also extremely dangerous to assume that a financial institution has your best interests at heart when one of its employees advises you to buy or sell certain stocks.

Even today, as we face a global financial melt down, Morgan Stanley Smith Barney are titillating its private clients with the idea that there are some uniquely "valuable buying opportunities" out there. This is nonsense. While there are no doubt opportunities, MSSB are unlikely to know what they are, and if they did know, they wouldn't be putting the average private clients into it unless their major customers and themselves had already got set.

Those little lessons cost me a lot of money to learn.

If you look at disclaimers on some investment products, they specifically state that while one part of their organization is suggesting that a stock is a "buy" another part may be shorting that same stock to the depths of the ocean.

[ALAEA Fed Sec]

Can anyone please link me to the J P Morgan report?

[gobbledock]

Steve,

The below link is just a starting point if you want to know about Morgan. Suffice to say that you dont go to jail when you control the rule makers.
Enjoy the journey, it starts here;

The Illuminati Banksters: JPMorgan vs. Goldman Sachs (http://www.infiniteunknown.net/2010/01/30/the-illuminati-banksters-jpmorgan-vs-goldman-sachs/)

[gobbledock]

if lislee gets cut from the executive she can still ask her nephew ,whom she promoted to manager of 'customer care', for a job.
ian, you should be very careful where you second staff from, they have you seen you bury the skeletons and they have kept the dates. your closure of customer complaints is breathtaking Oh dear, does anybody see a pattern within the upper layers of this multi-labyrinth food trough ?? I am wondering hypotheticaly what would happen if every scrap of dirt, proof, favouritism, mates rates, fiddles, nepotism and rule bending/breaking evidence was laid bare for the world to see in regards to the top echelon, meticulously and accurately documented with times, dates, names and other evidence? Just curious.

[tail wheel]

JP Morgan is not the largest shareholder in Qantas, those shares are part of JP Morgan's custodial (trustee sort of thing) role for superannuation funds. The various funds own the shares but they are required to be held by a custodian who transacts at the direction of the fund in question.

I know that. But the custodian ends up with almost a billion proxy votes at the AGM.

The analysis comes from a separate part of the bank and no, they do not get special private access to any financial information, that would mean jail time if they did (assuming they got caught).

I know that too. But an astute custodian with exposure to almost a billion shares heading south, would be accessing every legal piece of financial and statistical data possible, from all sources, in order to present an accurate and authoritive opinion - and I suspect on this occasion that is exactly what they have done.

With the shares now on special around $1.42, obviously the Mum and Dad investors are not impressed and are selling out ..... whilst strangely, the institutional investors are very quiet and sitting pat?

I wonder why........ :=

[chockchucker]

Ben Sandilands is on the money once again this morning.........

How Qantas has butchered London flights
August 23, 2011 – 7:40 am, by Ben Sandilands

Tomorrow when Qantas reports its full year results to June 30, we can expect more misleading rhetoric about how its international operations are mercilessly rendered uneconomic by competition from state run carriers and the ruinous pay claims of its employees, despite the best efforts of the world’s most overpaid airline executives.

But have a look at what the ‘new Spirit of Australia’ is doing to its flagship route to London, where it has traffic slots for up to four return A380 services daily.

Sydney-London on Qantas after the restructuring takes effect

Sydney-London before restructuring

The thinner red line on the top graphic is all that is left of the Qantas presence between Sydney-London, an A380 via Singapore, while Melbourne customers also get an A380 via Singapore to themselves.

The green squares are the gifting by Qantas to British Airways of the flights it could have operated, to provide its Australian service all the way to and from London, no matter whether via Singapore, Bangkok or Hong Kong.

But Qantas now expects those who are trying to support an Australian carrier to fly British Airways to deal with the overflow, its generosity with your loyalty so great that BA has had to upgrade its capacity from Boeing 777-200ERs for larger Boeing 747-400s, meaning the green squares representing those flights will be carrying far more seats previously provided on Qantas jets.

And unless the frequent flyer conditions are changed, anyone who is sold those BA operated flights using a BA rather than QF flight number will get less points on most economy fares than on Qantas. Unless you have joined the 82% of overseas travellers who have given up on Qantas in favor of competing airlines.

What is happening to Qantas is not about unfair competition, or the ‘outrageous’ pay demands of its staff, it is about the woefully dismal direction of the long haul carrier by a management and board that are infatuated with numbers games and the spread of the Jetstar franchise, and the abundant opportunities to flaunt the Qantas Sale Act because neither the government nor the opposition intends to do anything other than wring their hands and keep troughing it in the Chairmans Lounges.

While Qantas heads off to Asia to put full size sleeper seats in shorter range single aisle A320s in a new premium carrier (what on earth is Joyce thinking) it is running down its long haul operations in order to participate in an Asian market defended by obviously weak and unpopular and defenceless brands like Singapore Airlines and Cathay Pacific who will give up their markets overnight and make Qantas shareholders so fabulously rich that dividends will be reinstated.

For Qantas to trade on its Australian identity in these circumstances is obscenely misleading. The rationale offered for giving away half the London market is that it retires four aged 747s. Which have no real value except for scrap. That’s millions upon millions of dollars of future revenue hosed into the wind.

It won’t go to British Airways, but to the likes of Emirates, Singapore Airlines and Cathay Pacific because, as the market has shown for more than a decade of declining Qantas participation, consumers aren’t that silly. The “I still call Australia home” message has lost its credibility. It no longer tugs the heart strings. It is a sham, just like the Qantas trans Tasman flights that are painted up as Qantas but flown by a New Zealand entity that Qantas claims for tax purposes is an independently managed Kiwi company which it isn’t game to call for what it is.

There is no doubt that Jetstar makes sense as a business investment, even though consumers in Australia might have noticed it is anything but cheap these days, and that the best deals are still found on Qantas domestic services.

But the seeming self hatred of Qantas for the costs of excellence, and its unwillingness to build the long haul carrier in favor of adopting a defeatist approach to fleet, schedule and product, is a tragedy for this country.




Obviously one of the few journos out there with a clear vision of what is happening to what was an iconic company, and not one of the mainstream upstart excuses for journos that just parrot out what QF media relations feeds them.:ugh:



(apologies for the missing graphic in this article but, I think you still get the idea)

[Romulus]

I know that. But the custodian ends up with almost a billion proxy votes at the AGM.

Not really, they must be voted as directed by the fund they are being held for. It is entirely possible that of every 100 votes JP Morgan would proxy 60 to vote Yes and 40 to vote No (or any other legit combination).

the custodian must vote at the direction of the beneficial owner.

I know that too. But an astute custodian with expose to almost a billion shares heading south, would be accessing every legal piece of financial and statistical data possible, from all sources, in order to present an accurate and authoritive opinion - and I suspect on this occasion that is exactly what they have done.


The custodian has nothing to do with it. They merely transact as instructed by the fund who is actually buying the shares. The analysts are not part of the custodial unit of the branch for very good reason, they belong to any number of other advisory areas and they are paid to follow certain sectors, transport is one of these sectors.

The fact that companies overall are recommending Buy and Sell positions whilst doing exactly the opposite in other areas of their business is actually a good thing. If there was 100% alignment in positions then there would definitely be something fishy going on. As long as it is not the case that the analysts for a given part of the bank are recommending buy at the exact time they are actively selling (i.e. directly pumping a stock so they can sell at an inflated price) then that's fine.

JP Morgan will analyse Qantas, no doubt about that. They will scrutinise every report concerning aviation they can gt to try and glean a legitimate advantage for their customers, that is what they are paid for. And having been involved in those types of Chinese walls they are an absolute pain in the arse because of the bureaucracy they cause but as a result they do work.

As an example of how seriously they are treated there are dedicated security personnel ensuring you can't even access conflicting parts of the business. If I'm a broker advising clients then I can use the publicly issued reprots, but there is no way in heck that I will ever be allowed within cooee of the institutional guys who do the takeover deals etc. That's not to say that leaks don't occur when someone on the inside tells a couple of friends, we've all seen enough movements to believe that happens, but nobody in their right mind is going to openly tell anyone inside the company what is illegal information.

Unfortuneately there's no perfect way around it, information is far too easily disseminated and business is by its very nature too interrelated to be perfectly isolated, but the mechanisms work to the gretaest possible extent.

[unionist1974]

Romulous , you are spot on . Poor old Ben has never forgiven the bow-tie for stopping his freebies . Go back pre the bow-tie and read the gushing reports from the lad . Makes interesting his comments now . Maybe a membership of the Chairmans lounge could fix it .

[ampclamp]

How the insto's vote upon whose instruction is a moot point, The real point is JP Morgan issued a research note totally contradictory to Joyce's recent public statements. Either the analyst was at the wrong briefing, can't read previous reports and / or can't add up ???? Then again perhaps someone else is guilding the lilly?

[my oleo is extended]

Tomorrow when Qantas reports its full year results to June 30, we can expect more misleading rhetoric about how its international operations are mercilessly rendered uneconomic by competition from state run carriers and the ruinous pay claims of its employees, despite the best efforts of the world’s most overpaid airline executives.
There you have it all in one paragraph !! Brilliant work again Ben !
I reckon AJ should cancel the conference, Ben is on the money as usual..
Only decent reporter with balls..